October 10, 2014
Improving your credit score can save you thousands of dollars in interest when you buy a home. What are 3 proven ways to improve your score?
Improving your credit score can save you thousands of dollars in interest when you buy a home. What are 3 proven ways to improve your score?
The most important thing to do to improve your credit score is to pay off your credit cards in full every month so you do not always have a balance on them. A second way to improve your score is to raise your credit limit on your cards and only use less than 10% of the available balance during the cycle. Make sure to leave good old debt on your report, such as paying off your house or car. If you go shopping for a loan make sure to do it in the same week as your first hard inquiry, you want to avoid to many hard inquiries but if you keep all the inquiries for one item close together they only count as 1. Pay bills on time and pay late bills as soon as you can. Never go to a payday loan place.
You made many good points, Garrett. Let’s review.
1. Pay on time.
2. Use a small amount of available credit in relation to what is available. Keep it under 30% and ideally below 10%.
3. Keep your credit for long periods of time. That means not getting rid of credit cards for new credit cards.
4. Be very careful when applying for new credit. Only do it when you know you will qualify and don’t waste your time when you probably don’t qualify.
5. Monitor your credit reports very carefully for mistakes or outdated information. Go to annualcreditreport.com to review them once per year at no charge.